Commercial banks post 22.36% profit in Q2; core business satisfactory, but not the NPL  

ShareSansar, February 16:

Comparing the unaudited financial reports for the second quarter of the current fiscal year with that of the corresponding quarter, commercial banks of the country have reported a profit growth of 22.36 percent in the second quarter.

Though the growth is modest, the core business scenario is satisfactory as evident from the net interest income, which increased by almost 11.32 percent in the quarter as compared to the corresponding one. (See Table 1)

Their deposits have also increased by almost 21 percent and loan by a little more than 18 percent.

While the provisioning has also decreased by 26 percent and the write back has increased almost the same percentage, the non-performing loan has also increased by 11 percent, which is not at all good.

(Figures in Rs ‘000’)

Table 1: Comparative figures of second quarter

The top five commercial banks in terms of profit in the second quarter are Nabil Bank Limited, Nepal Investment Bank Limited, Rastriya Banijya Bank, Everest Bank Limited and Standard Chartered.  (See Table 2). Comparing the statistics with the latest traded prices of these commercial banks, it may also be argued that, the scrip of NIBL is quite undervalued.

Table2: Top Five Commercial Banks as per Net Profit

Similarly, Century Commercial Bank, Civil Bank Limited, Commerz and Trust Bank (Nepal) Limited, which is merging with Global IME Bank,  Janata Bank Nepal Limited and Kist Bank Limited were the worse performing commercial banks in the second quarter.

Table3: Least Five Commercial Banks as per Net Profit